Libya’s bourse gets off to a slow start

March 15, 2012 - 11:17:46 pm

 

A trader speaks on a mobile phone as she works on the floor of the Libya Stock Exchange in Tripoli yesterday.

TRIPOLI: Libya’s Stock Exchange resumed trading yesterday after more than 12 months out of action, as the country gets back to business after last year’s conflict ousted leader Muammar Gaddafi.    

Officials on the trading floor rang a bell then shouted “Allahu Akbar!” to announce the start of trading on a bourse which, its backers say, could take off now that it is unshackled from Gaddafi-era restrictions.    

“People are scared to come to Libya because they fear all the guns. Today can show them that Libya is going back to normal,” said a visiting businessman from Dubai, who did not want to be identified.    

After the 90 minutes allotted for trading each day, the market stood at 1,437.69 points, flat on the level at which it closed in February last year. The only stock showing any sign of movement on the huge electronic trading screen was Tijara bank, whose shares rose slightly. However, the volume -- 452 shares traded -- was not big enough to register any impact on the stock market index.    

“There are few buyers and sellers. People are afraid of falling prices,” said Ahmed Mejburi, a broker for Economic Group Libya who sat at his desk on the trading floor watching the screen. “The market has been closed for one year. It’ll start weak and, step by step, get back.”    

Ten companies resumed trade yesterday out of a total of 13 listed which includes the stock exchange. Officials have said the reduction was because some of the firms had not yet met the exchange’s regulatory requirements.      

The bourse stopped trading soon after a rebellion broke out against Gaddafi’s 42-year rule. Its re-launch is likely to attract interest from foreign investors seeking opportunities in the new Libya, which is home to Africa’s biggest proven oil reserves.    

The companies listed on the exchange have a combined market capitalisation of about 3.9 billion Libyan dinars ($3 billion), general manager Ahmed Karoud said last month in an interview.      

The biggest companies include Jumhiriya Bank, Sahara Bank and Wahda Bank. A bourse official said that, to avoid volatility on the opening day, trading would be briefly suspended if shares rose or fell by more than 1.5 percent.    

Under Gaddafi, the bourse attracted fitful foreign interest. Investors were keen for a slice of the lucrative Libyan market but they were often put off by red tape, currency restrictions, and arbitrary rulings from Gaddafi and his inner circle.    

The head of the bourse said he planned to make the bourse a more attractive place for foreigners to invest. Speaking to Reuters last month, Karoud also said five public share offerings as well as two funds would be listed this year.    

“The first IPO will be at the end of May,” he told Reuters on Thursday, adding pre-war plans to list Libya’s two mobile operators, Libyana and al Madar, would go ahead next year.    

“A lot of foreign companies have called about Libya’s stock market,” he added, saying interest had come from the Middle East, Europe and the United States.    

Asked about yesterday’s slow start, Karoud said: “People are afraid, for now they want to see what happens. We hope the market will go up.” Reuters

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